May sales in Red Deer were up compared to April but were down compared to May of last year. The number of active listings I up substantially from last month and is also higher than last year at this time. In spite of the increasing spread between supply and demand the market manage to stay just inside CMHC’s definition of “balanced”.
Sellers who are wondering why their properties aren’t selling only need to look at the 21% sales to listing ratio. That means only two out of ten properties for sale on MLS sold last month. The price of real estate is dictated by the relationship between Supply and Demand just like the price of oil or lumber. When there are only two buyers for every 10 homes on the market, those buyers will naturally turn to the one that offers the most value for the money.
No amount of slick or aggressive marketing can overcome a price that is obviously too high when the property is compared with others on the market. It is understandable that homeowners expect their property to be worth more than they paid for it, but unfortunately that isn’t always the case. The one thing to remember is that prices in a local market are almost always relative – if you sell low, you will also buy low.